Japan raises interest rates to 31-year high to curb impact of rising prices
Increase from 1% to 1.25% follows US Federal Reserve and European Central Bank tightening monetary policy Business live – latest updates Japan’s central bank has increased interest rates to a fresh 31-year high as it attempts to combat global inflation linked to the war in Iran. The Bank of Japan (BoJ) voted to raise its target interest rate from 1% to 1.25%, the highest level since 1995.…
The Bank of Japan raised its key interest rate to a 31-year high of 1.25%, aiming to curb global inflation driven by the Iran conflict. This move aligns the BoJ with similar policy decisions made by the US Federal Reserve and European Central Bank to tighten monetary policy. While the BoJ's policy committee vote was not unanimous, with two members opposing the increase, Bank Governor Kazuo Ueda hinted at potential future rate hikes depending on inflation trends.
Ueda emphasized the need to maintain inflation at the 2% target and avoided committing to a specific timeline for future adjustments. Japan's central bank has been increasing rates since 2024, responding to the yen's weakening against the US dollar amid the Iran war's impact on global markets. The BoJ's decision follows calls for further rate hikes, though investors remain cautious about the timing of additional increases.
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